A federal judge on Thursday approved an $82 million sale of Revel Casino Hotel to developer Glenn Straub’s company, rejecting one attorney’s pleas to hold another auction so a pair of high-profile East Coast developers could make their own bid.
The deal could close on Monday, after the judge formally issues her ruling.
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Chief U.S. Bankruptcy Judge Gloria Burns said she “thought long and hard” during a court recess about delaying a sale. But “there’s no funding left,” she said.
Minutes earlier an attorney for Wells Fargo, Revel’s main lender, said Wells wouldn’t keep bankrolling Revel’s Chapter 11 case, which has been grinding since June.
“Your honor, this isn’t a tunnel. This a hole. And it gets deeper. And there is no light,” said Thomas Kreller, for the bank.
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On the third anniversary of Revel’s opening, at least five groups with varying degrees of interest were in a Camden courtroom to consider putting in an offer on Atlantic City’s most spectacularly failed property.
Michael Kessler, an attorney for a group led by East Coast real estate tycoons Howard Milstein and Carl Goldberg, said his client wants to make an $88 million offer but couldn’t strike a deal with Revel’s power supplier, ACR Energy Partners.
“My client is a prospective purchaser” and there should be another auction for the property, he told Judge Burns.
Also present in the courtroom was California investor Richard Meruelo, who’s long expressed interest in buying the failed resort, and Vincent Crandon, a New York investor who for weeks has talked about making an offer.
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But none submitted a definitive offer.
And the only man who did — Straub — arrived in the courtroom, yet again, in a neon yellow Revel security jacket.
Revel adviser Ramy Ibrahim testified Thursday that the deal with Straub’s Polo North Country Club remains “the only real offer that we have.”
Then Straub took the stand, testifying that he: might bail on the Revel deal; might buy the old Showboat casino; might buy Atlantic City Race Course; and might build a 1,000-horse stable.
But the developer told the ACR attorney questioning him that this is certain: “I come from West Virginia.”
He said his plans for Atlantic City go far beyond the 6.2-million-square-foot Revel — “Showboat, MGM, Borgata ... partners at Boyd Gaming ... the new marina, the airport we’re reactivating” — but that doing business in Atlantic City has so far left him with a bad taste in his mouth.
“It is just tough to do business in that city. How many times have I met with the mayor?”
Thursday’s hearing marks the third time Polo North has asked for court permission to buy Revel.
Prior deals have collapsed over disputes about what, if any, obligations Polo North has to the restaurants and other commercial tenants inside the beachfront complex, which cost $2.4 billion to build and closed after less than three years, having never turned a profit.
If Polo North boots the tenants from the premises, their investments there could be wiped out.
As things stand, they’d have a general unsecured claim for their losses, which is virtually worthless when you consider the dire math of Revel’s restructuring.
The vast majority of sale proceeds will go to Wells Fargo, which has provided about $63 million, and counting, to fund Revel’s bankruptcy, plus about $75 million in the lead-up to Revel’s June Chapter 11 filing.
Unsecured creditors could get a $1.6 million sop. Revel’s attorneys would likely get millions for their work.
But the tenants, Judge Burns said, might get “at the best, a penny.”
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